All commercial real estate must comply with the American Disabilities Act (ADA), which ensures that people with disabilities have safe access to any business or public building. Although ADA requirements changed in 2012, some property owners may still be unaware of this change. So anyone buying or selling commercial real estate should know about the current ADA laws and how they affect their properties in order to be compliant.
ADA and Commercial Properties
The American Disabilities Act (ADA) regulations exist to ensure that all public buildings are accessible by and safe for people with disabilities. These laws cover everything from the requirement of handicapped parking spaces and wheelchair ramps outside a building to the use of proper flooring and carpeting within the building. Fines can be given for buildings that are not in compliance with ADA laws. Therefore, ADA compliance can be a big concern when buying or selling commercial real estate. It is especially significant concerning transactions on older buildings, which may require updating according to the most recent additions to ADA regulations.
What Do Recent Changes to ADA Law Mean?
Before 2012, older buildings constructed before certain ADA laws were in place could be grandfathered under current law; however, this has changed. All publicly accessible buildings, including those that were previously exempt, are now required to update according to current ADA requirements.
What this means to owners of commercial real estate is that any time they or a tenant make any kind of modification to the building, that change must be made in compliance with ADA regulations. The two main areas of concern with most older, non-compliant commercial properties is parking lot coating, paving, or striping and the replacement of floors or carpeting.
Who Is Responsible for ADA Compliance?
There is a lot of confusion about who is responsible for ADA compliance, especially concerning older buildings. Is it the building owner or the tenant who has to make improvements to commercial real estate? Since it is generally accepted that anyone who is making modifications to a building must make those changes in compliance with ADA regulations, many building owners feel the tenant should pay for any needed modifications. Yet tenants feel that the building owner should pay for ADA modifications since they own the building.
Responsibility for making and maintaining required updates can be dictated in a commercial lease; basically, both parties are still liable in a variety of ways. On the positive side for those who own or who buy and sell commercial real estate, any updates made to a building in order to become ADA compliant are fully tax deductible.
Because of ADA laws and the necessity to be in compliance, those buying and selling commercial real estate must be aware of current regulations and how each building complies. Owners of commercial real estate may be able to negotiate the cost and planning of any required updates with their tenants. Ultimately, it is the building owner who will be held responsible for any lack of compliance. The need for updates could also become a bargaining point between buyers and sellers of investment properties. To learn more about ADA compliance with investment properties, buyers and sellers should discuss this point with an experienced commercial broker!